Mon. Dec 4th, 2023

Women are still facing retirement with substantially less saved in their pensions than men. Low pay is a major contributing factor to the gender pension gap as women often take part-time positions or become self-employed to manage family commitments.

On average, women earn about 16% less than men, according to the latest figures from the Office for National Statistics.

Time taken out of work to raise a family can also result in broken national insurance records, and years without putting any money into savings at all.

This week, the insurer Legal & General published research showing that women have lower pension pot sizes in every age bracket, with the situation “significantly deteriorating” as they approach retirement.

The research, based on data from 4 million L&G pension scheme members, found that the typical gender pension gap is 17% at the beginning of women’s careers and increases to 56% at retirement compared with men.

Meanwhile, the average L&G pension pot for a woman at retirement (£10,000) was found to be less than half that of a man (£21,000).

However, some women are bucking the trend. Here, we speak to women at different life stages who are determined to boost their pension savings in the run-up to, and into, retirement.

Sandra Wrench, 70 – delaying the state pension

Sandra Wrench from Bedford.
Sandra Wrench from Bedford. Photograph: David Levene/The Guardian

Sandra Wrench, from Bedford, doubled her state pension by delaying taking it for seven and a half years, and also paying for some additional pension.

Since May, she has received about £16,000 a year in state pension, in addition to the £11,000 final salary pension she receives from employment.

“This is more than I earned in total when I was working,” says Wrench, who worked for the Department for Work and Pensions, with 18 years spent in the state pension department.

“So I knew about the benefits of delaying, and paying for state pension top-ups while this scheme was around,” she says.

When she turned 60, Sandra partly retired, reducing her working week to 17 hours. “This way, I could keep going for longer,” she says.

As Sandra reached the state pension age before 6 April 2016, she was able to increase her entitlement by 1% for every five weeks she postponed starting to take it, under the old system.

“I also used inheritance to pay voluntary class 3A contributions for an extra £25 a week additional pension but this scheme was only available for a few years,” she adds. “It was to give those who received the old, smaller state pension the opportunity to increase the amount they received.”

By combining delaying her state pension payment with the additional amount, she doubled its value from about £151 a week to £310 a week.

“Women shouldn’t leave checking their state pension until the last minute,” she stresses. “It’s easier to correct any errors sooner rather than later, and there are still ways to increase the amount you get.”

Kathy Honeyball, 54 – maximising her company pension

Kathy Honeyball from Sheffield.
Kathy Honeyball from Sheffield.

Kathy is doing whatever she can to boost her pension, with dreams of retiring early.

“I’d like to start phasing my retirement in three years or so,” says Kathy, who works as a client relationship manager for an insurer. “Then I’d want to spend more time helping with the grandchildren or doing something different such as volunteering.”

Kathy, who expects to receive her state pension at 67, has £587,000 saved in defined contribution pensions, also known as money purchase plans. This consists of about £367,000 in the company pension with her current employer, and a couple of other, smaller pots from previous employment.

“I started to take a look at my own pension around the time when auto-enrolment was introduced [in 2012] and the state pension age started to increase,” she says, adding that she increased the amount she was paying into her company pension to about 15% of salary, with her current employer contributing a little bit less.

The divorcee lives in Sheffield and has two sons, aged 26 and 23.

“I think it’s important to be in control of your future,” she says. “I’ve got a partner but we’re not married and I’ve always been financially independent.”

By using an online retirement calculator, Kathy has worked out that her pension savings could provide an income of about £24,000 a year from the age of 60, depending on the investment growth.

Jess Keplinger, 38 – getting a head start

Jessica Keplinger.
Jessica Keplinger from north-west London.

Jess knows that taking time out of work to raise her son will have seriously effects on her pension pot.

“But I’m lucky, because I learned the value of saving from my parents, and I’ve built up some retirement savings,” she says.

She was working in events management but since having her son, who is almost three, she has struggled to find a job that was sufficiently flexible to cope with nursery pickups.

“It’s a situation so many mums find themselves in,” says Jess, from West Hampstead in north-west London. “I’m not able to pay into a pension at the moment but I’m working hard juggling a lot at home.”

Her husband works in finance, and as the lower earner, she took a career break to raise their son. She is now retraining as a self-employed naturopathic health coach.

Jess has about £100,000 in a self-invested personal pension (Sipp) with Interactive Investor, after consolidating four pensions from previous employment.

“My dad set up a Sipp and Isa for me when I was little, so I had a head start, too,” she says.

“I don’t know why women aren’t told at school about the value of a pension. They often bear the brunt of a massive savings gap in their 30s.”

Jess manages her pension herself, investing in a range of shares and funds within her Sipp.

“If I went back into full-time employment, I’d see a pension as one of the biggest benefits,” she adds. “When I can, I’ll start paying in again.”

a graphic illustrating a male and female sitting on different sized piles of coins.
Research by Legal & General found that the typical gender pension gap is 17% at the beginning of women’s careers and increases to 56% at retirement compared with men. Photograph: Joe Giddens/PA

Taking charge of your retirement

Check your national insurance contribution (NIC) record

The full new state pension is currently £179.60 a week. You will need 35 years’ worth of qualifying NICs to receive the full state pension, which may consist of earnings-related contributions, national insurance credits (for example, if you were unemployed, ill or a parent or carer) or voluntary contributions. You will usually need at least 10 “qualifying years” on your NIC record to get any state pension.

You can check your record at to see: what you have paid, up to the start of the current tax year; any national insurance credits you have received; if gaps in contributions or credits mean some years do not count towards your state pension (that is, they are not qualifying years); and if you can pay voluntary contributions to fill any gaps, and how much this will cost.

If you find there are gaps, check the government website for things such as who is eligible to pay class 2 or class 3 contributions and how it all works.

The rates for the 2021-22 tax year are £3.05 a week (£158.60 for a year) for class 2, and £15.40 a week (£800.80 for a year) for class 3.

Meanwhile, if you are claiming child benefit for a child aged up to 12, or a carer’s allowance for an adult, you are entitled to NI credits, which contribute towards your state pension entitlement.

Save into a pension – even if you are not working

You can still save up to £2,880 into a pension each tax year if you are not working, and the government will boost this by £720 through tax relief, which means £3,600 in total goes into your pot. These are the figures for the current 2021-22 tax year.

If this is affordable, your savings can come out of other accounts, such as a bank savings account, or your partner may pay into a pension on your behalf.

Pay into your pension during maternity leave

“If you stop paying in, your employer can stop, too,” says Sarah Coles, a personal finance analyst at the investment firm Hargreaves Lansdown. “And if you can afford to keep up contributions, you’ll pay less because you only pay in a percentage of your maternity pay. But your employer has to continue at their usual level.”

Top up your pension

“Women planning to take a career break should try to pay extra into their pension before they stop working, to compensate for the future loss of employer contributions,” says Kay Ingram, a chartered financial planner at LEBC Group. Some employers will offer to match extra contributions, and tax relief also boosts personal savings.

Woman looking at phone at her office desk
If you need guidance there are websites and free tools to help you. Photograph: Mihailomilovanovic/Getty Images

Make use of free help

There are plenty of free tools and websites that can guide you along the way. The insurer Aviva offers a “Mid-Life MOT” app that can show you where your retirement savings stand and how to fix shortfalls. At retirement, there is the government-backed free guidance service Pension Wise at to help understand your options. You can also use one of the many online retirement income calculators, such as the investment company Fidelity’s MyPlan.

Delay taking your state pension

For every nine weeks you delay (defer) taking your state pension, it increases by 1%, which works out at just under 5.8% for a year. So if you are entitled to £179.60 a week, by deferring for 52 weeks you will get an extra £10.42 a week. (The above applies to those reaching state pension age after 6 April 2016).

If you are healthy and want to stay in work, this could make sense. But be aware that, based on those numbers, it would take you 17 years to earn back all of the pension you missed out on by deferring for a year.

So, as the former pensions minister Ros Altmann has put it, if you go down this road, you need to live for a long time in order to make up for the period in which you received nothing.

By senior